USTA and ACA Comment on FCC's NPRM on Exclusive Contract
Prohibition of Program Access Rules

3/25. On March 20, 2012, the Federal Communications Commission (FCC) adopted and released a
Notice of Proposed
Rulemaking (NPRM) [108 pages in PDF] regarding the exclusive contract prohibition of the
program access rules.

Walter McCormick, head of the US Telecom, stated in a
release that "Competition in the market for video services continues to
develop, and consumers continue to enjoy numerous choices in terms of better
service, newer technologies and lower prices. Revenue from the provision of
video services has been shown to be a key driver supporting the economics of
deploying robust broadband networks in higher cost areas."

But, he continued that "content remains king, and competition will not be able to thrive
if cable companies are allowed to withhold certain essential programming, such as regional sports
networks that allow consumers to see their favorite local sports teams."

McCormick wrote that "Initiating this rulemaking is an important step in ensuring
consumers continue to enjoy the benefits of a competitive market."

Matthew Polka, head of the American Cable
Association (ACA), which represents small cable operators, stated in a
release that the "ACA commends
the FCC for asking the right questions in the program access NPRM released
yesterday. Importantly, the FCC asks whether the program access rules adequately
address potentially discriminatory volume discounts, and if not, how to revise
the rules to address these concerns."

The FCC wrote in this NPRM, citing comments filed with the FCC by the ACA and others, that
small multichannel video programming distributors (MVPDs) "have expressed concern that
cable-affiliated programmers charge larger MVPDs less for programming on a per-subscriber
basis than smaller MVPDs due to volume discounts, which are based on the number of subscribers
the MVPD serves. As a result, smaller MVPDs claim that they are placed at a significant cost
disadvantage relative to larger MVPDs. Some commenters have claimed that this price differential
is not cost-based because program production and acquisition costs are sunk; delivery costs
do not vary; and administrative costs are not different. According to some commenters, without
a basis in cost, this wholesale practice amounts to price discrimination." (Footnotes
omitted.)

See for example, this ACA
comment,
beginning at page 17, and this ACA
comment.

Polka added that "The FCC also seeks comment on whether and how to revise rules that
address uniform price increases imposed by vertically integrated, cable operator-owned
programmers."

The NPRM addresses volume discounts at paragraphs 98-100.

This ACA release states that "FCC regulations are flawed because they leave
small operators with no more than a few remedies, if that, to combat vertically
integrated suppliers of programming that demand discriminatory prices, terms,
and conditions, and engage in other types of behavior barred by the rules".

3/23. The U.S. Court of Appeals (DCCir) issued an
order in Verizon v. FCC, its consolidated proceeding on petitions for review
and appeals of the FCC's December 2010 order adopting rules for the regulation of broadband
internet access service (BIAS) providers' network management practices.

The FCC adopted this order, also know as the network neutrality order, on
December 21, 2010, and released the text on December 23, 2010. See,
Report and Order
(R&O) [194 pages in PDF]. It is FCC 10-201 in GN Docket No. 09-191 and WC Docket No. 07-52.

Judicial review has been long delayed, largely as a result of dilatory
tactics by the FCC, such as withholding publication of a notice in the Federal
Register, and moving to hold all proceedings in abeyance.

All of the petitions for review and appeals have been consolidated in, and assigned by
lottery to, the DC Circuit. However, the Court has yet to set a briefing schedule.

This March 23 order states as follows:

"It appearing that these consolidated cases present potential
problems of duplicative briefing, it is
ORDERED, on the court's own motion, that the parties submit within 30 days of
the date of this order, proposed formats for the briefing of these cases. The
parties are strongly urged to submit a joint proposal and are reminded that the
court looks with extreme disfavor on repetitious submissions and will, where
appropriate, require a joint brief of aligned parties with total words not to
exceed the standard allotment for a single brief. Whether the parties are
aligned or have disparate interests, they must provide detailed justifications
for any request to file separate briefs or to exceed in the aggregate the
standard word allotment. Requests to exceed the standard word allotment must
specify the word allotment necessary for each issue."

This report states that "Reliance on a global supply chain introduces
multiple risks to federal information systems and underscores the importance of
threat assessments and risk mitigation. These risks include threats posed by
actors -- such as foreign intelligence services or counterfeiters -- who may
exploit vulnerabilities in the supply chain, thus compromising the
confidentiality, integrity, or availability of the end-system and the
information it contains. This in turn can adversely affect an agency's ability
to carry out its mission." (Footnote omitted.)

This report does not identify or describe any actual exploitations that have
already occurred.

Nor does the report address supply chain vulnerabilities in the private
sector.

It finds that the DOE and DHS "have not developed clear policies that define
what security measures, if any, should be implemented to protect against supply
chain threats."

It also finds that the DOE, DOJ, and DHS "have neither developed and
documented procedures for implementing supply chain protection measures nor
established monitoring capabilities that are necessary to verify compliance
with, and the effectiveness of, these measures."

In contrast, the report finds that the DOD "has made greater progress by
defining supply chain protection measures and implementing procedures".

The House Commerce Committee's
(HCC) Subcommittee on Oversight and Investigations will hold a hearing at
10:00 AM on March 27 titled "IT Supply Chain Security: Review of
Government and Industry Efforts". The witnesses will be Gregory Wilshusen
(GAO), Mitchell Komaroff (Department of Defense), Gil Vega (Department of
Energy), Larry Castro (Chertoff Group), and Dave Lounsbury (The Open Group). See,
notice.

3/23. Rep. Henry Waxman (D-CA),
Rep. Ed Markey (D-MA), and
Rep. Anna Eshoo
(D-CA) sent similar letters to communications carriers, handset manufacturers,
and operating system developers regarding what they are doing, or could be
doing, to combat rising theft of smart phones, and protect consumers from theft
of personal and financial information.

See also, related story in this issue titled "House Democrats Introduce
Bill to Enable Service Blacklisting and Data Erasure for Stolen Mobile Devices".

The three are senior members of the
House Commerce Committee (HCC). Rep.
Waxman is the ranking Democrat on the HCC. Rep. Eshoo (at left) is the ranking
Democrat on the Subcommittee on Communications and Technology.

They wrote that theft of smart phones has increased. Then, "Thieves erase subscriber
identity in formation and resell stolen phones for pro fit or use these phones to commit other
crimes. The information on the stolen phones might also be utilized for nefarious
purposes."

They added that "Without the ability to lock or wipe cell phone memory, victims of cell
phone theft not only have to worry about replacing their device, but are also at risk of having
their personal and financial information stolen."

Also, "These incidents of theft raise important questions about what role wire less
providers, operating system developers, and handset manufacturers might play to combat cell
phone theft and protect the personal and financial in formation stored in wireless devices
from falling into the wrong hands."

The letters then propound numerous interrogatories, to be answered in writing
by April 11, 2012.

For example, they state that "Law enforcement and others have suggested
that the ability to disable remotely mobile devices would reduce or eliminate
resale value and thus lessen the incentive for cell phone theft", and then
ask, "What are your views on this technology as a deterrent to theft?"

They also ask, "If your company has knowledge that a specific phone has been
reported stolen, do you allow such a phone to be subsequently reactivated with a
different phone number?"

The also stated that "Australia has implemented a cell phone ``blacklisting´´ program
in which phones that have been reported stolen are placed on a list and cannot be reactivated
if an individual brings them in to a local carrier. This has significantly reduced cell phone
theft in Australia." They then ask, "Would a similar program work in the United
States?" (Footnote omitted.)

See also, HCC Democrats
web page with a list of the 19 companies, and hyperlinks to the 19 letters. This page does
not reference a letter to Huawei, which makes smartphones. However, this page does list AT&T,
which sells Huawei's
Impulse.

AT&T Reproves FCC Over Call Center
Closures

3/23. T-Mobile USA closed seven call centers in the U.S. See,
story titled "T-Mobile to close third of US call-centres" in Financial
Times, March 23, 2012, by Paul Taylor.

The FT wrote that "Deutsche Telekom's struggling T-Mobile USA unit is to
close almost a third of its US call-centres and eliminate a net 1,900 jobs as
part of an effort to cut costs in the face of a decline in subscribers."

AT&T seized the occasion to criticize the Federal Communications Commission (FCC) for
the manner in which is reviewed and condemned the proposed merger of AT&T and T-Mobile USA
last year. That proceeding was WT Docket No. 11-65.

AT&T's Jim Cicconi stated in a
release that "Yesterday, T-Mobile made the sad announcement that it would be closing
seven call centers, laying off thousands of workers, and that more layoff announcements may
follow. Normally, we’d not comment on something like this. But I feel this is an exception
for one big reason -- only a few months ago AT&T promised to preserve these very same
call centers and jobs if our merger was approved. We also predicted that if the merger failed,
T-Mobile would be forced into major layoffs."

Cicconi continued that "At that time, the current FCC not only rejected our pledges
and predictions, they also questioned our credibility. The FCC argued that the merger would
cost jobs, not preserve them, and that rejecting it would save jobs. In short, the FCC said
they were right, we were wrong, and did so in an aggressive and adamant way."

AT&T had represented to the FCC in its merger review proceeding that "T-Mobile
non-management employees whose job functions are no longer required because of the merger
will be offered another position in the combined company" and the merger "will not
result in any job losses for U.S.-based wireless call center employees of T-Mobile or AT&T
who are on the payroll when the merger closes".

On about December 1, 2011, the FCC released a
document [157
pages PDF scan in 20 MB] titled "Staff Analysis and Findings". The
Commission did not vote to adopt this document, or to reject the merger or the
license transfers associated with the merger. However, this document roundly
criticized the proposed merger, and AT&T and T-Mobile's arguments.

This document discussed the likely impact of the proposed merger on employment in
paragraphs 259-265. The FCC did not actually reject or accept AT&T's representation
that it would not lay off call center employees. Rather, it argued that the commitment was
not significant because call centers have high turnover. See, Paragraph 263, and footnotes.

Cicconi stated that "Rarely are a regulatory agency's predictive judgments proven so
wrong so fast. But for the government's decision, centers now being closed would be
staying open, workers now facing layoffs would have job guarantees, and
communities facing turmoil would have security."

Cicconi wrote that one lesson of this is the importance of "regulatory humility".
He said that "The FCC may consider itself an expert agency on telecom, but it is not
omniscient. And when it ventures far afield from technical issues, and into judgments about
employment or predictions about business decisions, it has often been wildly wrong.

He said that the other lesson is that when the government is wrong, "the
price of a bad decision is too often paid by someone else."

Gigi Sohn, head of the Public
Knowledge (PK), which opposed the merger, stated in a release that "It
was truly unfortunate that a top AT&T official blamed some layoffs at T-Mobile
on the government's blocking of AT&T's takeover of its competitor. T-Mobile
started losing customers and distributors when the takeover started. Their ads
and marketing were frozen as the deal dragged on, and customers left. Now they
face getting those customers back and investing in their network."

People and Appointments

3/23. President Obama announced that the U.S. is nominating Jim Yong Kim,
President of Dartmouth College, to be President of the
World Bank. The current President is Robert Zoellick, former
U.S. Trade Representative. See, White House news office
release. Historically, World Bank Presidents have been U.S. citizens.

3/23. The Government Accountability Office
(GAO) released a report
[7 pages in PDF] titled "To Date, DISH Network Is Cooperating with the
Court-Appointed Special Master’s Examination of Its Compliance with the Section
119 Statutory License".

House Democrats Introduce Bill to Enable
Service Blacklisting and Data Erasure for Stolen Mobile Devices

3/22. Rep. Eliot Engel and others introduced
HR 4247 [LOC |
WW], the "Cell
Phone Theft Prevention Act of 2012", a bill that would require service providers to not
provide service to a stolen phone.

Rep. Engel (at right) stated in a
release that "It makes no sense to reward the thief by continuing service on
a stolen cell phone. It's simple common sense to say the victim of a crime isn't
responsible for service they are no longer receiving. If service is cut off on a
stolen phone, it just becomes a useless brick."

First, the bill would mandate that service providers not continue to provide service to a
stolen phone. The phone owner would have to first file a complaint with police.

The bill would add a new section to the Communications Act that provides that
"A provider of commercial mobile service or commercial mobile data service may
not provide service on a mobile electronic device that has been reported to such
provider as stolen", either by "the person who holds the account with respect to
such service, if such person submits to such provider a copy of a report made to
a law enforcement agency regarding the theft", or by "by another provider of
commercial mobile service or commercial mobile data service".

Second, the bill would also require services providers to enable phone theft
victims to erase data on their stolen phones.

It provides that "A provider of commercial mobile service or commercial mobile data
service on a mobile electronic device shall make available to the person who holds the account
with respect to such service the capability of deleting from such device, from a remote location,
all information that was placed on such device after its manufacture."

To enable these mandates, the bill would require that any covered device
manufactured in, or imported into, the US contain a unique identifier.

This bill would cover cell phones, smart phones, tablet computers, and any
other devices for which commercial mobile service or commercial mobile data
service is provided. However, it would exempt prepaid service, and any service
for which "the consumer does not have a direct relationship with the provider of
commercial mobile service or commercial mobile data service".

Neither the FCC nor the CSRIC released the text of any recommendations.

These FCC releases, and Genachowski's speech, describe three CSRIC reports
that contain a set of proposals, directed primarily at commercial providers of
internet access services, compliance with which would be voluntary.

The FCC does not now propose to adopt any rules, or initiate any adjudicatory
proceedings. Genachowski stated that "Solutions to cyber threats require the
multiple stakeholders of the Internet community to work together and develop
practical solutions to secure our networks. The goal isn't regulation".

He also stated that AT&T, CenturyLink, Comcast, Cox, Sprint, Time Warner, and
Verizon "have already committed to implement the core recommendations of all
three reports".

The FCC Chairman also predicted that the "CSRIC’s voluntary cybersecurity
measures will soon become the industry standard operating procedures".

3/22. The Department of Justice (DOJ)
filed a civil complaint in the U.S.
District Court (WDPenn) against AT&T alleging violation of the federal False
Claims Act (FCA) in connection with its receipt of federal payments for IP Relay
calls by international callers who were ineligible for the service.

The DOJ explained in a
release
that "IP Relay is a text-based communications service designed to allow
hearing-impaired individuals to place telephone calls to hearing persons by
typing messages over the Internet that are relayed by communications assistants
(CAs) employed by an IP Relay provider. IP Relay is funded by fees assessed by
telecommunications providers to telephone customers, and is provided at no cost
to IP Relay users. The FCC, through the TRS Fund, reimburses IP Relay
providers".

The DOJ release states that the complaint alleges that "AT&T knowingly
adopted a non-compliant registration system that did not verify whether the user
was located within the United States" and that "AT&T continued to
employ this system even with the knowledge that it facilitated use of IP Relay
by fraudulent foreign callers"

The Federal Communications Commission (FCC) stated in a
release that it "welcomes the Department of Justice's filing, which arises
from an investigation that the Commission's Office of Inspector General actively
assisted."

The FCC added that "Fraudulent IP Relay practices are a serious problem the
Commission has been addressing, and the Commission's Enforcement Bureau also has
ongoing investigations of IP Relay practices. We will continue to work with DOJ
and other law enforcement authorities to protect these critical services from
abuse."

This case is U.S. ex rel. Lyttle v. AT&T Corp., D.C. No. 2:10-cv-1376,
U.S. District Court for the Western District of Pennsylvania..

House Judiciary Committee to Hold Hearing on
IP Bills

3/22. The House Judiciary Committee (HJC)
announced that its Subcommittee on Crime, Terrorism, and Homeland Security will hold a
hearing on two intellectual property bills on Wednesday, March 29, 2012 -- HR 4216
[LOC |
WW],
the "Foreign Counterfeit Prevention Act", and HR 3668
[LOC |
WW], the
"Counterfeit Drug Penalty Enhancement Act of 2011".

HR 3668 would address the problem of counterfeit drugs, some of which are sold through
the web sites dedicated to infringing activity that were targeted by the stalled the SOPA
and PIPA bills. See, HR 3261
[LOC
| WW],
the "Stop Online Piracy Act" or "SOPA", and S 968
[LOC |
WW], the
"Preventing Real Online Threats to Economic Creativity and Theft of Intellectual
Property Act of 2011", "PROTECT IP Act", or "PIPA".

HR 4216 would enable Customs and Border Protection (CBP)
to share information with, and thereby obtain assistance from, rights holders and injured
parties regarding the importation of infringing products and circumvention devices. A similar
provision was included as Section 8 of the stalled PIPA.

HR 3668 and Increased Penalties for Trafficking in Counterfeit Drugs.Rep. Patrick Meehan (R-PA) introduced HR 3668
on December 14, 2011. See also, HR 3468
[LOC |
WW], introduced by
Rep. Meehan on November 17, 2011. He is not a member of the HJC. However,
Rep. Linda Sanchez (D-CA), co-sponsor of the
bill, is a member.

The Senate passed its version of this bill on March 8, 2012, by voice vote. See,
S 1886 [LOC
| WW],
also titled the "Counterfeit Drug Penalty Enhancement Act". See also,
story titled "Senate Approves Bill to Increase Penalties for Trafficking
in Counterfeit Drugs", in
TLJ Daily E-Mail Alert
No. 2,348, March 7, 2012.

HR 3668 and S 1886 are simple bills that would merely amend
18 U.S.C. § 2320(b) to increase
penalties for trafficking of counterfeit drugs. They would increase the maximum penalties for
individuals to $4 Million fines, and 20 years in prison. For corporations, the
maximum fine would be raised to $10 Million.

Currently, the statute imposes the same maximum penalties for trafficking in counterfeit
drugs and trafficking in counterfeit clothes and fashion accessories.

Sen. Patrick Leahy (D-VT) discussed
S 1886 in the context of Google and online sales of counterfeit drugs in the
Senate, and at a SJC meeting.
He said that "we have taken steps to advance legislation to prevent the online sale of
counterfeit drugs with the PROTECT IP Act."

Sen. Leahy, who is the lead sponsor of both S 1886 and the PIPA, added that
"Unfortunately, some of the same large companies that through their businesses
make money out of selling these drugs that end up killing Americans, were among
those who tried to block, and did block, at least temporarily, the PROTECT IP
Act. I hope that maybe people will start thinking about what is best for the
American people, and not just what is best for their bottom line".

3/22. The Federal Communications Commission (FCC) announced the appointment
of 14 members to the FCC's Technical Advisory Board for First Responder
Interoperability. See, FCC
release.

FCC Adopts NPRM on Interoperability in 700
MHz Bands

3/21. The Federal Communications Commission (FCC) adopted and released a
Notice of Proposed
Rulemaking (NPRM) regarding interoperability in the lower 700 MHz bands.

FCC Chairman Julius Genachowski
wrote in his
statement that
"Since the completion of the 700 MHz auction in 2008, we have seen the emergence of two
non-interoperable band classes for devices. This was an unanticipated development, and it is
having consequences that raise real concerns."

This NPRM proposes no rules. It is in the nature of an inquiry that is intended to
prompt AT&T, Verizon Wireless, and others to develop interoperability on their own.

FCC Commissioner Mignon Clyburn
wrote in her
statement that she wants either an industry solution, or an FCC mandate, by the end of
the year.

The smaller companies have complained to the FCC that AT&T and VW have
developed two distinct band classes, without interoperability, and that this has
harmed their ability to develop their spectrum, and diminished consumer choice.

For example, there is now one version of Apple's iPad that works only with
AT&T's service, and another that works only with VW's. Apple stated in a March 19
release regarding its latest iPad that "4G LTE is supported only on AT&T and
Verizon networks in the U.S."

For a comparison of the two offerings, see for example, March 15, 2012, CNET
story titled "AT&T vs. Verizon, 4G LTE networks battle
it out", by Lynn La.

A group called the 700 MHz Block A Good Faith Purchaser Alliance filed a Petition for
Rulemaking with the FCC on September 29, 2009. The members are Cellular South, Cavalier
Wireless, Continuum 700, and King Street Wireless. The FCC assigned the number RM-11592.
(The FCC has terminated this with the opening of this rulemaking proceeding, which is WT
Docket No. 12-69.)

The lower 700 MHz band spectrum is located at 698-746 MHz. It consists of three blocks of
12 megahertz each of paired spectrum -- Lower A, B, and C Blocks -- and two blocks of 6
megahertz each of unpaired spectrum --Lower D and E Blocks. The Lower A Block is adjacent
to Channel 51, at 692-698 MHz, which has been allocated for TV broadcast operations at power
levels of up to 1000 kW.

Filings with the FCC by AT&T and VW on this issue assert that the potential for harmful
interference is the cause of this lack of interoperability.

FCC NPRM. The just released NPRM states that "Since the completion of the 700
MHz auction and the subsequent clearing of the spectrum, however, certain Lower 700 MHz A
Block licensees have asserted that the development of two distinct band classes within the
Lower 700 MHz band has hampered their ability to have meaningful access to a wide range of
advanced devices. The result, they argue, is that this spectrum is being built out less
quickly than anticipated (and in some cases not at all), so that a large number of Lower
700 MHz A Block licensees are unable to provide the level of service and degree of competition
envisioned at the close of the auction and as contemplated by the Communications Act. The
700 MHz band, at 70 megahertz, one of the largest commercial mobile service bands, is the
only non-interoperable commercial mobile service band." (Parentheses in original.
Footnote omitted.)

This NPRM contains no proposed rules. Nor does it offer a description of a
proposed mandate. Rather, it merely states that "we
initiate this rulemaking proceeding to promote interoperability".

The NPRM states that "We will evaluate whether the customers of Lower 700 MHz B
and C Block licensees would experience harmful interference -- and if so, to what degree
-- if the Lower 700 MHz band were interoperable."

The NPRM adds, "We also explore the next steps should we find that interoperability
would cause limited or no harmful interference to Lower 700 MHz B and C Block licensees, or
that such interference can reasonably be mitigated through industry efforts and/or through
modifications to the Commission's technical rules or other regulatory measures."

Statements by Commissioners. FCC Chairman Genachowski wrote in his
statement
that "I hope and expect that industry will take the lead in developing an interoperability
solution to allow for additional deployment of mobile broadband networks and increase the choice
of providers available to consumers. An industry-led solution would be the preferable solution,
and multiple stakeholders have indicated that a unified band class can be win-win if interference
concerns are addressed. Of course, we are launching this proceeding because no solution has been
reached yet and we will be closely monitoring progress in addition to developing a record as
part of this proceeding."

FCC Commissioner Robert McDowell
wrote in his
statement that
"Although I support today's action, I hope that all interested parties will come to the
negotiating table and work in good faith to develop their own solution. Government mandates
should be a last resort."

He added that "we might not be here today were it not for earlier mandates handed
down in July of 2007 from which I dissented." See, McDowell's
statement
[6 pages in PDF] dissenting in part from the FCC's
Second Report and
Order [312 pages in PDF], which adopted service rules for the 700 MHz auction. The FCC
adopted that order on July 31, 2007, and released the text on August 10, 2007. It is FCC 07-132.

FCC Commissioner
Mignon Clyburn (at right) wrote in her
statement that when the FCC wrote service rules for the 700 MHz spectrum in 2007, it
"did not anticipate there would be a standard setting process, which would divide the
lower 700 MHz band, and would impede the ability of devices for A Block licenses to work on
B Block and C Block networks."

She wrote that "This lack of interoperability means fewer device and service choices
for consumers. Fewer competitive options result in higher prices."

The FCC's "failure to anticipate this particular anticompetitive development means
the Commission needs to move as quickly as possible to achieve true interoperability".

She also stated that "the industry has already had more than four years to find a
solution. This industry knows how to arrive at interoperability." She added that
"until the splintering of the lower 700 MHz band occurred, the entire mobile wireless
industry had been operating with the understanding that this Commission expects
interoperability within all spectrum bands."

"This NPRM provides sufficient notice about the rules the Commission might adopt
if the industry does not achieve true interoperability across the lower 700 MHz band".

She concluded, "I look forward to an industry solution, or the adoption of
rules, by the end of this calendar year."

This NPRM is FCC 12-31 in WT Docket No. 12-69. Initial comments will be due within 60 days of
publication of a notice in the Federal Register (FR). Reply comments will be due
within 105 days of such publication.

Reaction to FCC NPRM on Interoperability in 700
MHz Bands

3/21. The Federal Communications Commission (FCC) adopted and released a
Notice of Proposed Rulemaking (NPRM) regarding interoperability in the lower
700 MHz bands. AT&T responded by criticizing proposals for an FCC
interoperability mandate. Others, including holders of smaller amounts of this
spectrum, argued that the FCC should impose such a mandate.

AT&T's Joan Marsh stated in a
release on March 21 that "interference challenges" have "prevented both
deployment and interoperability in the lower 700 MHz band".

"These challenges are well-documented and real. The high power broadcasts that
are permitted in channel 51 and in the lower E-block create the potential for significant
technical and deployment impediments in the neighboring lower 700 MHz blocks."

Marsh argued that "Some have argued that the technical and physical
limitations of the band should simply be ignored, and have called for sweeping
interoperability mandates. Such mandates would be an unprecedented regulatory
intrusion into a carrier’s right to manage network and device deployment in a
manner best suited to serve its customers."

She also asserted that "Such mandates would defy the
consensus-driven 3GPP standards process that has standardized the band in a
manner meant to address the real interference challenges present there. And
such mandates would do nothing to resolve the very serious limitations that act
as a prohibition on lower A-block deployment in over 30 markets nationwide."

The Rural Cellular Association (RCA) has been active
in submitting filings with, and meeting with staff of, the FCC, on behalf of
members that own smaller slices of the lower 700 MHz spectrum.

The RCA stated in a
release on March 21 that "voluntary efforts to resolve these interference claims
are not sufficient to facilitate the development of devices in the Lower 700 MHz spectrum
band. An FCC requirement is necessary to prevent AT&T from further using its monopsony
power to impede Lower A Block licensees from deploying 4G LTE mobile broadband throughout
the U.S. An interoperability requirement will greatly benefit consumers, encourage mobile
carriers to build out their networks, and help restore competition to the market."

Steve Berry, head of the RCA, stated in this release that RCA members "are
unable to build out their networks and compete with others moving to 4G/LTE
because of a lack of interoperability".

The Public Knowledge's (PK) Harold Feld
stated in a
release that "We are pleased the FCC has started down the path to help
consumers by furthering competition. Consumers should be able to use expensive
smartphones operating on the newest, fastest, spectrum bands on any carrier's
service, and not have to buy another phone if they change companies."

The Free Press's Matt Wood stated in a
release that "We hope and trust that the process begun today will lead to sensible
interoperability requirements for the Lower 700 MHz band and beyond. Such rules
could address any legitimate technical issues but should still prevent AT&T and
Verizon from dividing this prime mobile broadband spectrum into exclusive
technological enclaves. Waiting for the wireless industry to solve this problem
on its own seems a vain exercise when we have already been waiting four years
for such solutions, and none have been forthcoming from these duopoly providers."

He wrote that "Manufacturers like Apple produce two incompatible versions of the
same product for the U.S. market -- an AT&T-only iPad and a Verizon-only iPad -- that have
different types of radios built into them. Unwilling to bank solely on their ability to lock
down customers and handsets by means of exclusive contracts, AT&T and Verizon have used
their market clout to hardwire exclusivity into the devices."

Wood argued that "A large part of LTE's promise was the unification of
technical standards. Those standards should give consumers the chance to switch
providers without discarding their old phones or tablets, and give more carriers
the chance to compete by offering cutting-edge devices."

3/21. The Federal Communications Commission (FCC) adopted a
Notice of Proposed
Rulemaking and Notice of Inquiry ((NPRM and NOI) [84 pages in PDF] regarding allowing more
flexible use of 40 MHz of spectrum currently assigned to the Mobile Satellite Service (MSS)
in the 2 GHz band.

The NPRM contains proposed rules changes that would facilitate the use of this spectrum
for terrestrial mobile broadband. This NPRM proposes that the 2000-2020 MHz and 2180-2200
MHz spectrum bands be hereafter called "AWS-4".

FCC Chairman Julius Genachowski
wrote in his
statement that "With this item, we are moving to free up 40 MHz of 2 GHz
spectrum for mobile broadband". He added that "Today's NPRM proposes freeing up
spectrum by removing regulatory barriers and providing for flexible use of MSS
spectrum. The specific barriers we propose to remove are rules that have limited
this spectrum to satellite use."

In 1997 the FCC reallocated 70 megahertz of spectrum in the 2 GHz band to Mobile
Satellite Service (MSS), a service involving transmission between mobile earth stations
and one or more space stations. However, there remains little use of this spectrum.

In 2010 the Dish Network received approval from the U.S.
Bankruptcy Court (SDNY) to acquire spectrum from two bankrupt spectrum licensees -- DBSD
Satellite Services and TerreStar. Dish has stated in filings with the FCC that it wants to
use this spectrum to build a nationwide broadband network.

The FCC's International Bureau (IB) approved
the license transfer applications. However, the IB denied requests for waivers of MSS/ATC
rules. See, March 2, 2012, FCC/IB
order.

AT&T, for example, had argued that any conversion of the 2 GHz MSS band to
terrestrial broadband operations should be conducted through rulemaking, not an
ad hoc waiver process. See, AT&T's November 3, 2011,
filing.

The just released NPRM pertains to allowing Dish to use this spectrum for terrestrial
broadband.

The Public Knowledge's (PK) Harold Feld
stated in a
release that the FCC "is encouraging broadband competition by opening up terrestrial
satellite spectrum for another potential competitor to help consumers".

The Computer and Communications Industry
Association (CCIA) stated in a
release
that "The rulemaking today comes after the FCC faced incumbent carrier pressure
to deny a routine waiver earlier this month that would have allowed Dish to
deploy mobile handsets that didn't talk to satellite transmitters -- just ground
towers. The waiver would have allowed Dish to develop the handsets and deploy
them more cheaply to customers, making them a more viable competitor to Verizon
and AT&T whose handsets also just talk to ground towers."

Cathy Sloan of the CCIA stated that "The FCC needs to move expeditiously on
this proceeding -- because by definition it is slowing down competition in the
form of new competitive entry into this marketplace. We can appreciate the
pressure the FCC is under from those that don't want more competition, and would
rather force Dish into less favorable arrangements with existing providers."

AT&T Bob Quinn stated in a
release on March 21 that "We are encouraged by the Commission's action today
to facilitate mobile internet use in the 2 GHz band. The events of the last two
years have made clear that the challenges associated with finding additional
spectrum for commercial use are significant."

Quinn added that "Without additional spectrum in the hands of internet infrastructure
companies, consumers will not be able to realize all the mobile internet has to offer. It
is therefore imperative that the Commission expeditiously work to free up additional spectrum
and unlock the value in bands that are currently under-utilized because of interference or
service rule limitations."

Christopher McCabe of the CTIA stated in a
release that
"CTIA commends the FCC for taking steps to bring the 2 GHz Mobile Satellite Spectrum
to market for mobile wireless broadband services."

He added that the "CTIA has long called for the FCC to open a rulemaking as the next
step in determining how the 2 GHz spectrum should be most effectively deployed. CTIA
and our members look forward to working with the Commission to find ways to
harness this underutilized spectrum to benefit the nation's wireless consumers."

The FCC also issued a
release that describes this item. See also,
statement by
FCC Commissioner Robert McDowell, and
statement by
FCC Commissioner Mignon Clyburn. This item is FCC 12-32 in WT Docket No. 12-70, ET Docket No.
10-142, and WT Docket No. 04-356. Initial comments will be due within 30 days of publication
of a notice in the Federal Register (FR). Reply comments will be due within 45 days of such
publication.

Genachowski Forms Incentive Auction Task
Force at FCC

3/21. Federal Communications Commission (FCC) Chairman Julius Genachowski announced the
formation of an "Incentive Auction Task Force", and named Ruth Milkman its head.

Genachowski wrote in a
statement that "Implementing incentive auction authority involves most of the Bureaus
and Offices at the" FCC.

An incentive auction provides for the sharing of spectrum auction proceeds with the
licensees, such as TV broadcasters, who voluntarily relinquish that spectrum.

The Congress passed legislation in February that gave the FCC incentive auction authority.
It was contained within HR 3630
[LOC |
WW],
the "Middle Class Tax Relief and Job Creation Act of 2012".

Title II of the REAL ID Act imposes federal mandates on the states'
identification document process, and mandates state electronic databases and
data sharing. The Act sets minimum standards for states, penalizes states
that do not implement its standards, but nevertheless relies upon states to
implement it, at their own cost. Many states have refused to comply.

There is nominally a Department of Homeland
Security (DHS) imposed extended deadline of January 15, 2013, for compliance.
The DHS representative at the hearing said that "we have no plans to
extend the deadline".

House Republicans used the hearing to prod the Obama DHS to be more active on
REAL ID Act implementation and compliance.

Rep. James Sensenbrenner
(R-WI), the Chairman of the Subcommittee, presided at the hearing. He said
that "I authored REAL ID". He said that the DHS "is hindering
its implementation by the states", and has not allocated sufficient
resources to its implementation.

Sensenbrenner (at right)
said that "states need to understand that ... secure identification is a DHS
priority". He acknowledged that "there has been a disconnect between
the DHS and the states".

He also said that the law has lead to the improvement of state ID laws, even in
those states that have rejected the REAL ID Act. He urged the DHS to give better
guidance on how to comply, and not to extend the deadline for compliance.

Rep. Lamar Smith (R-TX), the Chairman
of the HJC, stated that "it seems that this administration has very little
interest" in addressing this issue.

He said that the Obama administration has "undermined the REAL ID Act whenever
possible", such as by extending deadlines for compliance. He also noted that
Secretary of Homeland Security Janet Napolitano's support for its repeal.

He concluded that unless the Act is implemented, "we set ourselves up for
another attack" like those of September 11, 2001.

Both Rep. Sensenbrenner and Rep. Smith focused on the use of improved
identification systems to thwart terrorist attacks. They did not discuss the use
of identification documents by employers in their capacity of de facto enforcers
of federal immigration laws.

No other Republicans spoke at this hearing.

Rep. Bobby Scott (D-VA), the ranking Democrat
on the Subcommittee, said that said that the REAL ID Act makes it more difficult for terrorists
to obtain identification, but it "also makes it more difficult for everybody else",
including law abiding citizens.

He said that there is resistance from the states, which have budgetary and privacy
concerns. He said that many states view it as an unfunded mandate, and have
stated that they will not comply with it.

He also noted that privacy advocates argue that the REAL ID Act creates "de facto
national ID card", and raises privacy concerns.

He said too that "millions of Americans could be at risk of identity theft", and
that it could make it harder for citizens to vote.

Rep. John Conyers (D-MI), the ranking Democrat on
the Subcommittee, enumerated numerous groups and individuals who oppose the
identification mandates of the REAL ID Act, including the ACLU, Consumer
Federation of America (CFA), Consumer Watchdog, former Rep. Bob Barr (R-GA).

He too complained that it is a huge unfunded mandate on the states. He added that it
raises privacy concerns, because it requires states to collect much personal
information, and then make it available to many entities.

The witness panel included three persons who have worked to implement the REAL
ID Act's identification mandates. See,
prepared
testimony of David
Heyman, the current DHS Assistant Secretary for Policy,
prepared
testimony of Stewart Baker,
who was DHS Assistant Secretary for Policy during the Bush administration, and
prepared
testimony of Darrell Williams, who was in charge of REAL ID Act issues at the DHS.

Heyman (at right) stated that securing
IDs is an imperative, and that states have made progress in implementing the
identification provisions of the REAL ID Act.

He added that while states have "principal responsibility" for implementation, the
DHS has provided grants to states. He also said that states and the DHS are building the
technical infrastructure to verify source documents. He said that the DHS has "issued
guidance documents", and will continue to issue guidance documents. He also said that the
DHS will continue to engage in "outreach".

He said that states "have made significant progress", and "we commend
them".

Williams described the DHS's
outreach activities. He also said that states need greater certainty and clearer guidance.

He said in response to questions from Rep. Scott that fraudulent IDs are
issued by state departments of motor vehicles, via corruption and bribery. However, he added
that the REAL ID Act attempts to address this by setting standards for states.

Baker, who returned to the law firm of
Steptoe & Johnson after his stint at the DHS, argued that the real privacy
issue is that identity theft is facilitated by "fake or fraudulent drivers
licenses". He also said that states should better protect the data that they collect.

He stated that even if most states comply, the fraudsters will migrate to the
ID systems of those states that are not in compliance. Hence, he concluded that
"until the last state comes on board we have a problem with our ID system".

He noted that the REAL ID Act allows the Secretary to impose penalties, but
that there is no political will to impose penalties.

Quam said that "states have made progress", and that every Governor is concerned
about the security of the states' drivers license systems. He said that the program as
initially conceived was an "unworkable and unfunded mandate". He argued that
"what we need is continued flexibility"

He noted that only six states have submitted full compliance statements,
some states have stated that they will not comply, or will not comply without
funding, and other states are in various degrees of compliance.

He stated that states need "clear guidance" from DHS, and "funding".

Rep. Jared Polis (D-CO) said that the REAL ID Act
constitutes a "back door federal takeover" of the state drivers licensing process.

He also asked whether there are some immigrant categories that are not eligible for state
drivers licenses, such as victims of illegally trafficking, and are therefore vulnerable.

Rep. Judy Chu (D-CA) said that REAL ID Act rules
require that addresses be on ID cards, but that domestic violence victims do not want their
address on ID cards. Williams said that the rules contain exceptions for judges, law
enforcement officers, and victims of domestic violence.

Rep. Sheila Lee (D-TX) said that the Act is
"a stalled law ready for burial". She added, "It is not functioning. It is
not working." And, it raises both privacy and voting rights concerns.

The REAL ID Act was enacted in 2005 as Division B of
HR 1268 (109th
Congress), which was a large appropriations bill. This Title
B contains many provisions. Those related to the federalization of state
identification systems are found at Title II of Title B, titled "Improved
Security for Drivers' Licenses and Personal Identification Cards".

The REAL ID Act imposes mandates upon the states that critics have estimated to run into
the tens of billions of dollars. For example, the National Conference of State Legislatures
(NCSL) and the National Governor's Association (NGA)
estimated that the program would cost states over $11 Billion in the first five years. See,
NCSL/NGA
report titled "The Real ID Act: National Impact Analysis".

The Act requires that states maintain electronic databases that include "all data
fields printed on drivers' licenses and identification cards issued by the State".

It also requires states to "Employ technology to capture digital images of identity
source documents so that the images can be retained in electronic storage in a transferable
format". It further requires that states "Provide electronic access to all other
States to information contained in the motor vehicle database of the State".

The Act provides that "a Federal agency may not accept, for any official purpose, a
driver's license or identification card issued by a State to any person unless the State is
meeting the requirements of this section".

While the REAL ID Act was enacted as part of an appropriations bill, it
appropriated no money to reimburse the states for the cost of implementing
the standards contained in the Act.